[AINews] Google admits AI Mode hurts Search revenue; -15% $500B drop worst since 2004 IPO. AI Bear Market coming?
Google admits AI Mode growth is cannibalizing Search ad revenue, worst stock drop since 2004 IPO
“It's worth noting that the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode.”
Google's Chief Business Officer publicly acknowledged that AI Mode's rapid query growth is suppressing Search revenue due to significantly lower monetization rates, triggering a ~15% stock drop and roughly $500B in market cap loss. This confirms the long-feared structural tension: AI summaries that eliminate the need to visit source pages also eliminate the ad impressions that fund Google's core business. The signal lands amid broader AI bear sentiment, with OpenAI also raising below target valuation, suggesting public markets are beginning to price in AI's cannibalization of existing revenue streams.